Piper Jaffray raised its ratings on Gap and L Brands to 'neutral' as the firm's survey indicated the strongest Black Friday participation in five years.

"Against a backdrop of accelerating momentum seen in holiday spending trends via our proprietary survey work and in the counsel of various industry updates over the Black Friday weekend, we are moving our investment rating on both GPS and LB," the firm wrote in an analyst note.

Piper remains concerned about market share losses at the core Gap division and L Brands' increasing dependence on strength in the Victoria's Secret PINK line to drive comparable-store sales growth in 2017. But the firm believes "broad-based relief is on the horizon for consumer discretionary spending, of which each GPS and LB could participate in by the rising tide."

The firm's survey findings indicated the strongest Black Friday participation in five years. Thirty-nine percent of respondents hit the stores and the web this year vs. 31% a year ago and a prior peak of 34% in 2014. Sixty-six percent of those that shopped this holiday weekend made a purchase in store, which is a 6% improvement from last year.

"This coupled with strong spending intentions in our first holiday survey a week ago, we believe the holiday is off to a decent start and GPS and LB should benefit," Piper contended.

Gap shares are likely pricing in fundamental underperformance in the next quarter, according to the firm. "That said, with shares having pulled back 17% since the company's (Q3) report compared with the 1% increase of the S&P 500-- we believe GPS is appropriately reflecting concerns on fundamentals," Piper added.